Guinness gains market share in Ireland as sales grow by 2.3%

IRISH GUINNESS drinkers are once again proving good for the drink's parent group, Diageo, after sales of the iconic stout grew 2.3 per cent in its home market in the 12 months to the end of June.

The growth was driven in part by a 3 per cent increase in draught wholesale prices in March, but Diageo said the volumes of Guinness sold had also increased, resulting in a gain in market share.

Guinness's performance in Ireland marks a turnaround on the previous year, when net sales value fell 7 per cent, and was achieved despite a decline in the overall Irish beer market.

Diageo Ireland director of corporate relations Michael Patten attributed the recovery to its "Alive Inside" marketing campaign and greater willingness among pub drinkers to "stay loyal" to the brand when drinking at home.

He said Guinness had gained market share in the on-trade (bars and restaurants) and off-trade (retail) sectors, although on-trade growth was stronger.

Guinness sales grew 6 per cent internationally, surging the most in African states such as Nigeria, Ghana and Cameroon. Sales in Europe were more sluggish, growing 3 per cent on average.

The price of a pint of Guinness in Ireland is set to rise by about nine cent, as Diageo said it would shortly announce a 2 per cent rise in its wholesale price. The drinks giant said last month it was considering the increase to cope with the higher cost of raw materials such as energy and malting barley.

Mr Patten said this year's harvest across Europe had been better, although it was a question of "wait and see" in relation to the Irish harvest, which has been delayed due to wet weather.

"We don't want to increase our prices but we have to in order to sustain our viability and make the investments we want to make," said Brian Duffy, global brand director for Guinness and chairman of Diageo Ireland.

Mr Duffy said an announcement on the location of the new Guinness brewery planned for the outskirts of Dublin would be made in the coming weeks. In the 2007 to 2008 fiscal year, Diageo incurred an exceptional charge of £78 million (€97 million) in relation to its restructuring plans.

Among Diageo Ireland's other brands, Carlsberg achieved 4 per cent growth in net sales value, while growth of 34 per cent in sales of Bud Light compensated for "a more challenging year" for Budweiser. Sales of Smithwick's exported to the US grew by 20 per cent while, on a global basis, Baileys sales were up 3 per cent.

Smirnoff sales in Ireland grew 2.4 per cent in volume terms and sales of Bushmills rose 5 per cent.

Internationally, Diageo's net sales rose 7 per cent to more than £8 billion (€9.95 billion), driven by sales of Johnnie Walker and Smirnoff. Operating profits rose 9 per cent to £2.2 billion.